Ages 25 and Under: Five Things to Do Right Now

Your 20’s can be a stressful time, from carving out your place in the workforce to establishing relationships and settling down. A large portion of this stress is financial—the ability to spend and save in order to meet your needs. Now is the perfect time to allay your concerns and begin working toward the future you want. “The early bird catches the worm” may be cliché, but it couldn’t be more appropriate. Tackle the following goals and take control of your own destiny.

Get serious about your career.

Whether you are still in school or in your first job, the beginning stages of your career will shape the rest of your life. The right path will allow you to earn a decent living while providing opportunities for growth. Ask yourself a few questions:

Does my career path motivate me?

Am I valued?

Do my salary and benefits sustain me? Do they allow me to save and plan for the future?

If you answered “no” to any of these questions, it’s time to change your presence in the workplace or consider other options. Give your skills and earning potential the attention they deserve.

Apply for new credit.

15 percent of your credit score is graded on credit length. A long and positive history is the best way to establish yourself as a reliable borrower, a quality that will come in handy as you apply for a mortgage, car loan and other financing. Look for a credit card with no annual fee and begin using it as soon as possible. Pay off the balance at the end of every month to keep your credit utilization low and to avoid accruing interest.

Invest, invest, invest.

Time is on your side—literally. You’re probably not thinking about retirement age, but now is the perfect time to start planning. With the help of compounding interest, saving as little as $5.00 a day can earn you more than $600,000 in 40 years. There’s no substitute for long-term growth—learn to profit from smart planning.

Manage your debt.

Future stability often depends on your current situation. If you are already saddled with debt (e.g., student loans, credit card balances), it’s imperative to manage your money carefully. Devise a plan to reduce your debt safely and deliberately. Consider the following example:

Cadence has $40,000 in student loans. Her minimum payments are $112 per month over 35 years, a term that will result in over $60,000 in accruing interest. Cadence wants to avoid wasting her cash, so she decides to increase her monthly payments to $325 to cover the interest and principal balance. This strategy will significantly reduce her overall burden and allow her to pay off the loan more quickly.

Life is full of tough decisions. Cadence may need to make sacrifices in order to make the right financial choices. Take a lesson from her resolve and do the same in your own life.

Learn about credit scoring.

Success and knowledge are symbiotic; it’s difficult to have one without the other. Similarly, financial success often relies on credit health, a subject you should study as soon as possible.Get to know the five factors of credit scoring (more on that here) and apply their principles to every area of your life.

They say youth is wasted on the young, but this sentiment shouldn’t apply to you. Make wise choices and think beyond your current age. Allow your finances to mature with you.